Betfair, operator of the Great Britain-based betting exchange and owner of TVG, wants to work with the United States pari-mutuel industry to expand wagering opportunities, a top official with the company said Dec. 8.
Gerard Cunningham, president of Betfair US, said innovation, not consolidation, should be pursued in the racing industry. Cunningham, who spoke during the University of Arizona Symposium on Racing & Gaming, said the future in the U.S. is growing the advance deposit wagering business in states in which it’s currently not expressly legal, and offering exchange betting.
Cunningham indicated Betfair would like to offer exchange wagering in the U.S. and claimed in other jurisdictions, exchange betting hasn’t negatively impacted pari-mutuel betting or bookmaking. He said bookmakers’ play has increased 10% since Betfair was launched in Great Britain.
“My concern is if we don’t do this, I don’t know what the future looks like for horse racing,” Cunningham said.
In response to a question concerning declining purses and increasing revenue for “middlemen” that serve as bet-takers, Cunningham said too much emphasis is placed on “splitting the pie” rather than making it larger. He did not discuss specific revenue splits offered by Betfair for U.S. content.
“People get heated over a half or a quarter of a percentage point,” Cunningham said. “They’re not talking growth. That’s a real problem I can’t solve.”
Betfair this year offered the Breeders’ Cup World Championships to its customers via the pari-mutuel and exchange platforms. Less than $1 million was wagered through pari-mutuels and about $25 million through the exchange, but revenue to Breeders’ Cup was said to be nearly the same through both channels.
Betfair takes a cut based on net winnings at the end of each day, so its revenue varies. Thus far, there hasn’t been a groundswell of support from U.S. racing industry officials for exchange betting.
With handle and purses down roughly 10% this year, a declining foal crop, and the economy not improving, the racing industry expects some consolidation in the coming years. Cunningham argued consolidation won’t be productive.
“We cannot shrink our way to greatness,” he said.